What changed in this filing

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Item 1. Financial Statements

2018-05-15 compared with 2017-11-13 · 707 added, 894 removed, 491 unchanged (77% of the section changed)

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Consolidated Balance Sheets

and cash equivalents

receivable, net

expenses and other current assets

March 31, 2018

December 31, 2017

Current Assets:

and Stockholders’

payable and accrued liabilities

for income taxes payable

portion of long-term debt, net of debt discount and debt issuance cost, related party

portion of long-term debt

Cash and cash equivalents

Restricted cash

Accounts receivable, net

Prepaid expenses

Inventory, net

Total Current Assets

Fixes assets, net

Intangible assets, net

Liabilities and Stockholders’

Current Liabilities:

payable, net of debt discount and debt issuance cost, related party

Accounts payable and accrued liabilities

Deferred revenue

Provision for income taxes payable

Current portion of long-term debt, net of debt discount and debt issuance cost, related party

Royalties Payable

Total Current Liabilities

Long-term Liabilities:

and contingencies

Note payable, net of debt discount and debt issuance cost, related party

Total Long-term Liabilities

Total Liabilities

Commitments and contingencies

Stockholders’

stock, $0.00001 par value;

Common stock, $0.00001 par value;

300,000,000 shares authorized;

89,862,683 and 89,862,683 shares issued and outstanding, respectively

stock to be issued (125,000 shares)

paid in capital

other comprehensive (loss) income

stockholders ’

Liabilities and Stockholders’

Additional paid in capital

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders ’

Total Liabilities and Stockholders’

accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Condensed Consolidated Statements of Income and Comprehensive Income

the three months ended

the nine months ended

and marketing

and administrative

and amortization

Condensed Consolidated Statements of Operations and Comprehensive Income

For the three months ended

March 31, 2018

March 31, 2017

Cost of sales

Operating expenses

from operations

(income) expenses

Remeasurement

gain on translation of foreign subsidiary

on change in fair value of derivative liability

on sale of assets

of debt discount

of debt issuance cost

other expenses (income)

income before income taxes

income after tax

income per share –

average common shares outstanding

Comprehensive

currency translation adjustment

Comprehensive

Selling and marketing

General and administrative

Depreciation and amortization

Total operating expenses

Income from operations

Other (income) expenses

Interest income

Interest expense

Remeasurement loss on translation of foreign subsidiary

Loss on sale of assets

Amortization of debt issuance cost

Total other expenses

Net income before income taxes

Income tax expense

Net (loss) income after tax

Net (loss) income per share –

Weighted average common shares outstanding

Comprehensive income:

Net (loss) income

Foreign currency translation adjustment

Comprehensive income

accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Condensed Consolidated Statements of Cash Flows

the nine months ended

Flows from Operating Activities

to reconcile net income to net cash provided by operating activities:

and amortization

of debt issuance cost

issued for services

based compensation expense

in the fair value of derivative liability

Remeasurement

gain on translation of foreign subsidiary

currency transaction loss

cash implied interest

on sale of fixed assets

of debt discount

in operating assets and liabilities:

payable and accrued liabilities

For the three months ended

March 31, 2018

March 31, 2017

Cash Flows from Operating Activities

Net (loss) income

Adjustments to reconcile net (loss) income to net

cash provided by operating activities:

Flows from Investing Activities

for acquisition of fixed assets

from sale of assets

of development fee

of earn out liability

cash used in investing activities

Flows from Financing Activities

of notes payable

from notes payable

of debt issuance cots

cash provided by (used in) financing activities

of exchange rate on cash and cash equivalents

increase in cash and cash equivalents

and Cash Equivalents, beginning of period

and Cash Equivalents, end of period

Disclosure of Cash Flow Information:

paid during the period for:

Disclosure of Non-cash Investing and Financing Activities:

of goodwill related to acquisition of Factor Nutrition to intellectual property

of goodwill related to acquisition of Breakthrough Products, Inc.

to intellectual property

of non-compete agreement related to acquisition of Breakthrough Products, Inc.

the value of shares issued to goodwill related to acquisition of Breakthrough Products, Inc.

of blogger database and intellectual property related to acquisition of Nomadchoice Pty Ltd.

To customer database

stock to be issued now issued

of common stock

stock issued for the acquisition of assets of Per-fekt

Depreciation and amortization

Amortization of debt issuance cost

Loss on sale of assets

Stock based compensation expense

Remeasurement loss on translation of foreign subsidiary

Foreign currency transaction loss

Non cash implied interest

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expense

Accounts payable and accrued liabilities

Deferred revenue

Net cash provided by operating activities

Cash Flows from Investing Activities

Payments for acquisition of fixed assets

Payment for acquisition of domain name

Proceeds from sale of assets

Restricted cash

Net cash used in investing activities

Cash Flows from Financing Activities

Repayment of notes payable

Net cash used in financing activities

Effect of exchange rate on cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and Cash Equivalents, beginning of period

Cash and Cash Equivalents, end of period

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for:

accompanying notes are an integral part of these unaudited condensed consolidated financial statements

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Neuragen Corp., Breakthrough Products, Inc., NomadChoice Pty Ltd., Synergy CHC Inc., Sneaky

Vaunt Corp and The Queen Pegasus Corp.

and The Queen Pegasus Corp.

and the results have been consolidated in these statements.

Summary of Significant Accounting Policies

accompanying condensed consolidated financial statements as of September 30, 2017 and December 31, 2016 and for the three and

nine months ended September 30, 2017 and 2016 are unaudited.

These unaudited condensed consolidated financial statements have

been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim

financial information and are presented in accordance with the requirements of Rule S-X of the Securities and Exchange Commission

(the “SEC”) and with the instructions to Form 10-Q.

Accordingly, they do not include all the information and footnotes

required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments

(consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for

the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the

fiscal year ending December 31, 2017.

The unaudited condensed consolidated financial statements should be read in conjunction

with the audited consolidated financial statements as of and for the year ended December 31, 2016 and footnotes thereto included

in the Company’s Annual Report on Form 10-K filed with the SEC on March 24, 2017.

accompanying condensed consolidated financial statements as of March 31, 2018 and December 31, 2017 and for the three months ended

March 31, 2018 and 2017 are unaudited.

These unaudited condensed consolidated financial statements have been prepared in accordance

with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and

are presented in accordance with the requirements of Rule S-X of the Securities and Exchange Commission (the “SEC”)

and with the instructions to Form 10-Q.

Accordingly, they do not include all the information and footnotes required by generally

accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting of

normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months

ended March 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31,

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial

statements as of and for the year ended December 31, 2017 and footnotes thereto included in the Company’s Annual Report

on Form 10-K filed with the SEC on April 2, 2018.

of Presentation

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highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

As of September

31, 2018, the Company had no cash equivalents.

The Company maintains its cash and cash equivalents in banks insured by the Federal

Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $250,000 per

The Company maintains its cash and cash equivalents in banks insured by

the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of

$250,000 per bank.

The Company minimizes this risk by placing its cash deposits with major financial institutions.

At September 30, 2017, the

uninsured balance amounted to $4,997,278.

2018, the uninsured balance amounted to $1,143,835.

Capitalization

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All of our intangible assets are subject to amortization except

intellectual property of $1,450,000 acquired as part of an Asset Purchase Agreement entered into with Factor Nutrition Labs LLC

on January 22, 2015 and $10,000 acquired as part of an Asset Purchase Agreement entered into with Perfekt Beauty Holdings LLC

and CDG Holdings, LLC on June 21, 2017.

intellectual property of $1,450,000 acquired as part of Asset Purchase Agreement entered into with Factor Nutrition LLC on January

22, 2015 and $10,000 acquired as part of an Asset Purchase Agreement entered into with Perfekt Beauty Holdings LLC and CDG Holdings,

LLC on June 21, 2017.

Intangible assets are amortized on a straight line basis over the useful lives.

September 30, 2017, our qualitative analysis of intangible assets with indefinite lives did not indicate any impairment.

As of March 31, 2018, our

qualitative analysis of intangible assets with indefinite lives did not indicate any impairment.

assets include equipment and intangible assets other than those with indefinite lives.

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a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value.

September 30, 2017, our qualitative analysis of long-lived assets did not indicate any impairment.

March 31, 2018, our qualitative analysis of long-lived assets did not indicate any impairment.

asset purchase is accounted for under the purchase method of accounting.

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over the estimated fair value of the net tangible and intangible assets acquired recorded as goodwill.

As of September 30, 2017,

our qualitative analysis of goodwill did not indicate any impairment.

However, as of December 31, 2016, our review of goodwill

related to one of our subsidiaries did indicate that the carrying amount of the asset may not be recoverable.

During the year

ended December 31, 2016, the Company fully impaired related goodwill and charged to operations an impairment loss of $1,983,160.

As of March 31, 2018, our

qualitative analysis of goodwill did not indicate any impairment.

of ASU 2014-09, Revenue from Contracts with Customers

January 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 606,

Revenue from Contracts with Customers (ASC 606) using the modified retrospective (cumulative effect) transition method.

this transition method, results for reporting periods beginning January 1, 2018 or later are presented under ASC 606, while prior

period results continue to be reported in accordance with previous guidance.

The cumulative effect of the initial application

of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings.

The timing of revenue recognition

for our various revenue streams was not materially impacted by the adoption of this standard.

The Company believes its business

processes, systems, and controls are appropriate to support recognition and disclosure under ASC 606.

In addition, the adoption

has led to increased footnote disclosures.

Overall, the adoption of ASC 606 did not have a material impact on the Company’s

condensed consolidated balance sheet, statement of operations and comprehensive income and statement of cash flows for the three

months ended March 31, 2018.

ASC 606 also requires additional disclosures about the nature, amount, timing and uncertainty of

revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized

from costs incurred to fulfill a contract.

As described below, the analysis of contracts under ASC 606 supports the recognition

of revenue at a point in time, resulting in revenue recognition timing that is materially consistent with the Company’s

historical practice of recognizing product revenue when title and risk of loss pass to the customer.

Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting

Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”).

ASC 605 requires that four basic

criteria must be met before revenue can be recognized:

(1) persuasive evidence of an arrangement exists;

(2) delivery has occurred

and/or service has been performed;

(3) the selling price is fixed and determinable;

and (4) collectability is reasonably assured.

The Company believes that these criteria are satisfied upon shipment from its fulfillment centers.

Certain of our distributors

may also perform a separate function as a co-packer on our behalf.

In such cases, ownership of and title to our products that

are co-packed on our behalf by those co-packers who are also distributors, passes to such distributors when we are notified by

them that they have taken transfer or possession of the relevant portion of our finished goods.

Freight billed to customers is

presented as revenues, and the related freight costs are presented as cost of goods sold.

Cancelled orders are refunded if not

already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered with specific promotions

and orders will be refilled if lost in transit.

receivable are generally unsecured.

The Company establishes an allowance for doubtful accounts receivable based on the age of

outstanding invoices and management’s evaluation of collectability.

Accounts are written off after all reasonable collection

efforts have been exhausted and management concludes that likelihood of collection is remote.

Any future recoveries are applied

against the allowance for doubtful accounts.

Company expenses marketing, promotions and advertising costs as incurred.

Such costs are included in selling expense in the accompanying

unaudited condensed consolidated statements of income.

and Development

incurred in connection with the development of new products and processing methods are charged to general and administrative expenses

Company utilizes FASB ASC 740, “Income Taxes,”

which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been included in the financial statements or tax returns.

method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities

and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the

differences are expected to affect taxable income.

Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”).

recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled

to receive in exchange for those goods.

Revenue recognition is evaluated through the following five steps:

(i) identification

of the contract, or contracts, with a customer;

(ii) identification of the performance obligations in the contract;

(iii) determination

of the transaction price;

(iv) allocation of the transaction price to the performance obligations in the contract;

and (v) recognition

of revenue when or as a performance obligation is satisfied.

The Company recognizes revenue upon

shipment from its fulfillment centers.

Certain of our distributors may also perform a separate function as a co-packer on our

In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers who are also

distributors, passes to such distributors when we are notified by them that they have taken transfer or possession of the relevant

portion of our finished goods.

Freight billed to customers is presented as revenues, and the related freight costs are presented

as cost of goods sold.

Cancelled orders are refunded if not already dispatched, refunds are only paid if stock is damaged in transit,

discounts are only offered with specific promotions and orders will be refilled if lost in transit.

Company does not have any contract assets such as work-in-process.

All trade receivables on the Company’s condensed consolidated

balance sheet are from contracts with customers.

incurred to obtain a contract are capitalized unless short term in nature.

As a practical expedient, costs to obtain a contract

that are short term in nature are expensed as incurred.

The Company does not have any contract costs capitalized as of March 31,

Contract Liabilities - Deferred

The Company’s contract liabilities

consist of advance customer payments and deferred revenue.

Deferred revenue results from transactions in which the Company

has been paid for products by customers, but for which all revenue recognition criteria have not yet been met.

Once all revenue

recognition criteria have been met, the deferred revenues are recognized.

Accounts receivable

Accounts receivable are generally unsecured.

The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s

evaluation of collectability.

Accounts are written off after all reasonable collection efforts have been exhausted and management

concludes that likelihood of collection is remote.

Any future recoveries are applied against the allowance for doubtful accounts.

Advertising Expense

The Company expenses marketing, promotions

and advertising costs as incurred.

Such costs are included in selling expense in the accompanying unaudited condensed consolidated

statements of income.

Research and Development

Costs incurred in connection with the development

of new products and processing methods are charged to general and administrative expenses as incurred.

The Company utilizes FASB ASC 740, “Income

Taxes,”

which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of

events that have been included in the financial statements or tax returns.

Under this method, deferred tax assets and liabilities

are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based

on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

A valuation allowance is recorded when it is “more likely-than-not”

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into common stock (using the “treasury stock”

method), unless their effect on net income per share is anti-dilutive.

As of September 30, 2017, options to purchase 6,300,000 shares of common stock and warrants to purchase 1,000,000 shares of common

stock were outstanding.

method), unless their effect on net loss per share is anti-dilutive.

As of March 31, 2018 and 2017, options to purchase 8,666,667 and 6,300,000 shares of common stock, respectively, were outstanding.

As of both March 31, 2018 and 2017, warrants to purchase 1,000,000 shares of common stock were outstanding.

following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings

per share for the three and nine months ended September 30, 2017, and 2016:

the three months ended

the nine months ended

income after tax

Weighted average

common shares outstanding

stock to be issued

shares from the assumed exercise of dilutive stock options

shares from the assumed exercise of dilutive stock warrants

potential common shares

per share for the three months ended March 31, 2018, and 2017:

Net (loss) income after tax

Weighted average common shares outstanding

Common stock to be issued

Dilutive potential common shares

Net (loss) earnings per share:

following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive:

the three months ended

the nine months ended

to purchase common stock

Company’s unaudited condensed consolidated financial statements are prepared using U.S.

GAAP applicable to a going concern,

which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The Company had

an accumulated deficit at September 30, 2017 of $6,730,041.

The Company had working capital of $4,861,810 as of September 30,

Due to acquisitions during 2015 of revenue-producing products, the Company believes it has established an ongoing source

of revenue that is sufficient to cover its operating costs and has income from operations of $3,511,270 during the nine months

ended September 30, 2017.

Management’s

plans to continue as a going concern include growing sales revenue on our existing brands, raising additional capital through

borrowing and sales of common stock.

However, management cannot provide any assurances that the Company will be successful in

accomplishing any of its plans.

ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described

in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.

The accompanying

unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is

unable to continue as a going concern.

Options to purchase common stock

Warrants to purchase common stock

Value Measurements

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to the fair value measurement.

of September 30, 2017, the Company has determined that there were no assets or liabilities measured at fair value.

of March 31, 2018, the Company has determined that there were no assets or liabilities measured at fair value.

consists of raw materials, components and finished goods.

The Company’s inventory is stated at the lower of cost (FIFO cost

basis) or market.

basis) or net realizable value.

Finished goods include the cost of labor to assemble the items.

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items were translated at exchange rates prevailing during the transaction date and other incomes and expenses were translated

using average exchange rate for the period.

The resulting translation adjustments, net of income taxes, were recorded in statements

of operations as Remeasurement gain or loss on translation of foreign subsidiary.

using an average exchange rate for the period.

The resulting translation adjustments, net of income taxes, were recorded

in the statements of operations as Remeasurement gain or loss on translation of foreign subsidiary.

functional currency of the Company’s other foreign subsidiary (Synergy CHC Inc.) is the Canadian Dollar (CAD).

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equity is translated at the historical rates.

Income and expense items were translated using average exchange rate for the period.

The resulting translation adjustments, net

of income taxes, are reported as other comprehensive income and accumulated other comprehensive income in the stockholder’s

Income and expense items were translated using an average exchange rate for the period.

The resulting translation adjustments,

net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income in the stockholder’s

equity in accordance with ASC 220 –

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All transactions

with related parties shall be recorded at fair value of the goods or services exchanged.

with related parties are recorded at fair value of the goods or services exchanged.

identification and selection is consistent with the management structure used by the Company’s chief operating decision

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Accounting Pronouncements

September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606),

Leases (Topic 840), and Leases (Topic 842).

The effective date for ASU 2017-13 is for fiscal years beginning after December 15,

We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements.

January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), which simplifies the goodwill impairment

Accounting Standards Update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No.

118, which expresses the view

of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date

on which the Tax Cuts and Jobs Act (H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent

Resolution on the Budget for Fiscal Year 2018) was signed into law.

We are currently evaluating the impact of adopting ASU 2017-13

on our consolidated financial statements.

December 22, 2017, the U.S.

federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles

II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (Tax Cuts and Jobs Act of 2017).

Stakeholders raised

a narrow-scope financial reporting issue that arose as a consequence of the Tax Cuts and Jobs Act of 2017.

The amendments in this

Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting

from the Tax Cuts and Jobs Act of 2017.

The amendments in this Update affect any entity that is required to apply the provisions

of Topic 220, Income Statement-Reporting Comprehensive Income, and has items of other comprehensive income for which the related

tax effects are presented in other comprehensive income as required by GAAP.

The amendments in this update is effective for all

entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.

Early adoption of

the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting

periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which

financial statements have not yet been made available for issuance.

The amendments in this Update should be applied either in

the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S.

federal corporate

income tax rate in the Tax Cuts and Jobs Act is recognized.

Accounting Standards Update is the final version of Proposed Accounting Standards Update 2018-210—Income Statement—Reporting

Comprehensive Income (Topic 220), which has been deleted.

We are currently evaluating the impact of adopting ASU 2017-13 on our

consolidated financial statements.

amendments in this Update provide an optional transition practical expedient to not evaluate under Topic 842 existing or expired

land easements that were not previously accounted for as leases under Topic 840, Leases.

An entity that elects this practical

expedient should evaluate new or modified land easements under Topic 842 beginning at the date that the entity adopts Topic 842.

An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with

the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease.

We are currently

evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements.

In September 2017, the FASB issued Accounting

Standard Update (ASU) 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic

840), and Leases (Topic 842).

The effective date for ASU 2017-13 is for fiscal years beginning after December 15, 2018.

Early adoption is permitted for

interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

We are currently evaluating the

impact of adopting ASU 2017-04 on our consolidated financial statements.

January 2017, the FASB issued ASU No.

currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements.

Board is issuing this Update to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying

the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment

amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require

an entity to apply modification accounting in Topic 718.

The amendment is Effective for all entities for annual periods, and interim

periods within those annual periods, beginning after December 15, 2017.

Early adoption is permitted, including adoption in any

interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued

and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance.

Update is the final version of Proposed Accounting Standards Update 2016-360—Compensation—Stock Compensation (Topic

718)—Scope of Modification Accounting, which has been deleted.

Adoption of this new

standard did not have any impact on the Company’s consolidated financial statements.

In January 2017, the

FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), which simplifies the goodwill impairment test.

The effective

date for ASU 2017-04 is for fiscal years beginning after December 15, 2019.

Early adoption is permitted for interim or annual goodwill

impairment tests performed on testing dates after January 1, 2017.

We are currently evaluating the impact of adopting ASU 2017-04

on our consolidated financial statements.

In January 2017, the FASB issued ASU No.

Business Combinations (Topic 805):

Clarifying the Definition of a Business.

new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities

is not a business.

The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed

of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business.

new standard will be effective for the Company on January 1, 2018;

however, early adoption is permitted with prospective application

to any business development transaction.

We are currently evaluating the impact of adopting ASU 2017-04 on our consolidated financial

November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), which requires that restricted cash and restricted

cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash

amounts shown on the statement of cash flows.

The effective date for ASU 2016-18 is for fiscal years beginning after December

15, 2018, and interim periods within fiscal years beginning after December 15, 2019.

Early adoption is permitted.

We are currently

evaluating the impact of adopting ASU 2016-18 on our consolidated financial statements.

August 2016, the FASB issued AS 2016-15, Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain

cash receipts and cash payments are presented and classified in the statement of cash flows.

The effective date for ASU 2016-15

is for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.

This new standard clarifies the definition of a business

and provides a screen to determine when an integrated set of assets and activities is not a business.

The screen requires that

when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable

asset or a group of similar identifiable assets, the set is not a business.

This new standard was effective for the Company on

January 1, 2018.

Adoption of this new standard did not have any impact on the Company’s

consolidated financial statements.

In November 2016,

the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), which requires that restricted cash and restricted cash equivalents

be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts shown

on the statement of cash flows.

The effective date for ASU 2016-18 is for fiscal years beginning after December 15, 2018, and interim

periods within fiscal years beginning after December 15, 2019.

Early adoption is permitted.

We are currently evaluating the impact

of adopting ASU 2016-18 on our consolidated financial statements.

In August 2016, the

FASB issued AS 2016-15, Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and

cash payments are presented and classified in the statement of cash flows.

The effective date for ASU 2016-15 is for fiscal years

beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.

Early adoption is

We are currently evaluating the impact of adopting ASU 2016-18 on our consolidated financial statements.

April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606):

Identifying Performance Obligations

and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability

of licensing implementation guidance.

The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended

by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years.

The Company has not yet determined the impact of ASU 2016-10 on its consolidated financial statements.

March 2016, the FASB issued ASU No.

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tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method.

We are currently evaluating the impact of adopting ASU No.

2016-09 on our consolidated financial statements.

March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606):

Principal versus Agent Considerations

(Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is

a principal or an agent.

ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or

services before they are transferred to the customer and provides additional guidance about how to apply the control principle

when services are provided and when goods or services are combined with other goods or services.

The effective date for ASU 2016-08

is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December

15, 2017, including interim periods within those years.

The Company has not yet determined the impact of ASU 2016-08 on its consolidated

financial statements.

January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016-01, which amends the guidance in U.S.

GAAP on the classification and measurement of financial instruments.

Changes to the

current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and

the presentation and disclosure requirements for financial instruments.

In addition, the ASU clarifies guidance related to the

valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt

The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption,

an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the

first reporting period in which the guidance is effective.

Early adoption is not permitted except for the provision to record

fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other

comprehensive income.

The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes.

Currently deferred taxes for each

tax jurisdiction are presented as a net current asset or liability and net noncurrent asset or liability on the balance sheet.

To simplify the presentation, the new guidance requires that deferred tax liabilities and assets for all jurisdictions along with

any related valuation allowances be classified as noncurrent in a classified statement of financial position.

This guidance is

effective for interim and annual reporting periods beginning after December 15, 2016, and early adoption is permitted.

adopted this guidance in the fourth quarter of the year ended December 31, 2015 on a retrospective basis.

The adoption of this

guidance did not have a material impact on the Company’s consolidated financial statements, and did not have any effect

on prior periods due to the full valuation allowance against the Company’s net deferred tax assets.

September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement –Period Adjustments.

the accounting for measurement-period adjustments relate to business combinations.

Currently, an acquiring entity is required

to retrospectively adjust the balance sheet amounts of the acquiree recognized at the acquisition date with a corresponding adjustment

to goodwill as a result of changes made to the balance sheet amounts of the acquiree.

The measurement period is the period after

the acquisition date during which the acquirer may adjust the balance sheet amounts recognized for a business combination (generally

up to one year from the date of acquisition).

The changes eliminate the requirement to make such retrospective adjustments, and,

instead require the acquiring entity to record these adjustments in the reporting period they are determined.

The new standard

is effective for both public and private companies for periods beginning after December 15, 2015.

Adoption of this new standard

did not have any impact on the Company’s consolidated financial statements.

August 2015, the FASB issued ASU No.

2015-14, Revenue From Contracts With Customers (Topic 606).

The amendments in this ASU defer

the effective date of ASU 2014-09.

Public business entities should apply the guidance in ASU 2014-09 to annual reporting periods

beginning after December 15, 2017, including interim reporting periods within that reporting period.

Earlier application is permitted

only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting

We are still evaluating the effect of the adoption of ASU 2014-09 on our consolidated financial statements.

July 2015, the FASB issued ASU No.

2015-11, Simplifying the Measurement of Inventory (Topic 330).

ASU 2015-11 simplifies the accounting

for the valuation of all inventory not accounted for using the last-in, first-out (“LIFO”) method by prescribing that

inventory be valued at the lower of cost and net realizable value.

ASU 2015-11 is effective for financial statements issued for

fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis.

expect the adoption of ASU 2015-11 to have a material effect on our consolidated financial statements.

April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).

provides guidance regarding the accounting for a customer’s fees paid in a cloud computing arrangement;

specifically about

whether a cloud computing arrangement includes a software license, and if so, how to account for the software license.

is effective for public companies’

annual periods, including interim periods within those fiscal years, beginning after

December 15, 2015 on either a prospective or retrospective basis.

Early adoption is permitted.

Adoption of this new standard did

not have any impact on the Company’s consolidated financial statements.

May 2015, the FASB issued ASU No.

2015-07, Fair Value Measurement (Topic 820):

Disclosures for Investments in Certain Entities

That Calculate Net Asset Value per Share (or Its Equivalent) This guidance eliminates the requirement to categorize investments

within the fair value hierarchy if their fair value is measured using the net asset value (“NAV”) per share practical

expedient in the FASB’s fair value measurement guidance.

The new standard is effective for fiscal years and interim periods

within those fiscal years, beginning after December 15, 2015.

Adoption of this new standard did not have any impact on the Company’s

consolidated financial statements.

February 2015, the FASB issued ASU No.

2015-02, Consolidation (Topic 810):

Amendments to the Consolidation Analysis, which is

intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability

corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed

security transactions).

The ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate

whether they should consolidate certain legal entities.

In addition to reducing the number of consolidation models from four to

two, the new standard simplifies the FASB Accounting Standards Codification and improves current U.S.

GAAP by placing more emphasis

on risk of loss when determining a controlling financial interest, reducing the frequency of the application of related-party

guidance when determining a controlling financial interest in a variable interest entity (“VIE”), and changing consolidation

conclusions for companies in several industries that typically make use of limited partnerships or VIEs.

The ASU will be effective

for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.

Early adoption is permitted,

including adoption in an interim period.

Adoption of this new standard did not have any impact on the Company’s consolidated

financial statements.

January 2015, the FASB issued ASU No.

2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20):

Income Statement Presentation by Eliminating the Concept of Extraordinary Items.

This ASU eliminates from U.S.

GAAP the concept

of extraordinary items.

ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2015.

A reporting entity may apply the amendments prospectively.

Adoption of this new standard did not have any impact

on the Company’s consolidated financial statements.

November 2014, the FASB issued ASU No.

2014-17, Business Combinations (Topic 805):

Pushdown Accounting.

This ASU provides an acquired

entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an

acquirer obtains control of the acquired entity.

An acquired entity may elect the option to apply pushdown accounting in the reporting

period in which the change-in-control event occurs.

If pushdown accounting is applied to an individual change-in-control event,

that election is irrevocable.

ASU 2014-17 was effective on November 18, 2014.

The adoption of this new standard did not have any

effect on our consolidated financial statements.

November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815).

ASU 2014-16 addresses whether the host contract

in a hybrid financial instrument issued in the form of a share should be accounted for as debt or equity.

ASU 2014-16 is effective

for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.

We have not previously and

do not currently have issued, nor were we or are we investors in, hybrid financial instruments.

Adoption of this new standard

did not have any impact on the Company’s consolidated financial statements.

August 2014, the FASB issued ASU No.

2014-15 Presentation of Financial Statements-Going Concern.

The amendments in this update

apply to all reporting entities and require an entity’s management, in connection with preparing financial statements for

each annual and interim reporting period, to evaluate whether there are conditions or events, considered in the aggregate, that

raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the

financial statements are issued (or within one year after the date that the financial statements are available to be issued when

This ASU is effective for annual periods ending after December 15, 2016.

We adopted this standard for the year ended

December 31, 2016.

Based on the results of our analysis, no additional disclosures were required.

June 2014, the FASB issued ASU No.

2014-12, Compensation –

Stock Compensation (Topic 718):

Accounting for Share-Based Payments

When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.

This ASU requires

that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance

ASU 2014-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December

Adoption of this new standard did not have any impact on the Company’s consolidated financial statements.

May 2014, the FASB issued ASU No.

2014-09, Revenue from Contracts with Customers (Topic 606).

ASU 2014-09 affects any entity using

GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer

of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts).

ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016.

August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 by one year for all entities and permits

early adoption on a limited basis.

ASU 2014-09 will be effective for the Company in the first quarter of 2018, and early adoption

is permitted in the first quarter of 2017.

We are still evaluating the effect of the adoption of the new standard on our consolidated

financial statements.

April 2014, the FASB issued ASU No.

2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment

(Topic 360) and Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.

ASU 2014-08 amends

the definition for what types of asset disposals are to be considered discontinued operations, as well as amending the required

disclosures for discontinued operations and assets held for sale.

ASU 2014-08 is effective for fiscal years, and interim periods

within those fiscal years, beginning on or after December 15, 2014.

The adoption of the new standard did not have any effect on

our consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, which amends the guidance in U.S.

GAAP on the classification

and measurement of financial instruments.

Changes to the current guidance primarily affect the accounting for equity investments,

financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments.

In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting

from unrealized losses on available-for-sale debt securities.

The new standard is effective for fiscal years and interim periods

beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment

to the balance sheet at the beginning of the first reporting period in which the guidance is effective.

Early adoption is not permitted

except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific

credit risk in other comprehensive income.

Adoption of this new standard did not have any

impact on the Company’s consolidated financial statements.

were various updates recently issued, most of which represented technical corrections to the accounting literature or application

to specific industries and are not expected to a have a material impact on the Company’s unaudited condensed consolidated

financial statements.

to specific industries and are not expected to a have a material impact on the Company’s consolidated financial statements.

consists of finished goods, components and raw materials.

The Company’s inventory is stated at the lower of cost (FIFO cost

basis) or market.

basis) or net realizable value.

carrying value of inventory consisted of the following:

March 31, 2018

December 31, 2017

Finished goods

Inventory in transit

Raw materials

Total inventory

January 22, 2015, inventory was pledged to Knight Therapeutics under the Loan Agreement (see note 10).

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receivable, net of allowances for sales returns and doubtful accounts, consisted of the following:

accounts receivable

accounts receivable, net

Prepaid Expenses and Other Current Asset

March 31, 2018

December 31, 2017

Trade accounts receivable

Less allowances

Total accounts receivable, net

Prepaid Expenses

expenses consisted of the following:

for inventory

subscriptions

March 31, 2018

December 31, 2017

Advances for inventory

Media production

Promotion - Bloggers

License agreement

Software subscriptions

Clinical Research

Miscellaneous

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its cash deposits with major financial institutions.

At September 30, 2017 and December 31, 2016, the uninsured balances amounted

At March 31, 2018 and December 31, 2017, the uninsured balances amounted

to $1,143,835 and $1,557,373, respectively.

of September 30, 2017, four customers accounted for 88% of the Company’s accounts receivable.

of March 31, 2018, three customers accounted for 71% of the Company’s accounts receivable.

As of December 31, 2017, three

customers accounted for 88% of the Company’s accounts receivable.

the nine months ended September 30, 2017, two customers accounted for approximately 34% of the Company’s net revenue.

the three months ended September 30, 2017, two customers accounted for approximately 50% of the Company’s net revenue.

the nine months ended September 30, 2016, four customers accounted for approximately 37% of the Company’s net revenue.

the three months ended September 30, 2016, three customers accounted for approximately 53% of the Company’s net revenue.

For the year ended December 31, 2016, three customers accounted for approximately 34% of the Company’s net revenues.

the three months ended March 31, 2018, three customers accounted for approximately 41% of the Company’s net revenue.

the year ended December 31, 2017, two customers accounted for approximately 42% of the Company’s net revenues.

Substantially

all of the Company’s business is with companies in the United States.

the three and nine months ended September 30, 2017 and the year ended December 31, 2016, our products were made by the following

the three months ended March 31, 2018 and the year ended December 31, 2017, our products were made by the following suppliers:

Innovations - Pittsburgh, PA

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Queen Pegasus

Actives - Gilbert, AZ

Actives –

Queen Pegasus

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Fixed Assets and Intangible Assets

of September 30, 2017 and December 31, 2016, fixed assets and intangible assets consisted of the following:

and equipment

accumulated depreciation

expense for the three months ended September 30, 2017 and 2016 was $27,134 and $16,089, respectively.

Depreciation expense for

the nine months ended September 30, 2017 and 2016 was $77,445 and $26,783, respectively.

During the nine months ended September

30, 2017, we sold fixed assets with an aggregate carrying value of $9,076 for $6,199 which resulted in loss on sale of fixed assets

intellectual property

assets subject to amortization

accumulated amortization

expense for the three months ended September 30, 2017 and 2016 was $369,722 and $281,990, respectively.

Amortization expense for

the nine months ended September 30, 2017 and 2016 was $968,841 and $844,306, respectively.

These intangible assets were acquired

through an Asset Purchase Agreement and Stock Purchase Agreements.

of March 31, 2018, and December 31, 2017, fixed assets and intangible assets consisted of the following:

March 31, 2018

December 31, 2017

Property and equipment

Less accumulated depreciation

Fixed assets, net

expense for the three months ended March 31, 2018 and 2017 was $36,408 and $25,065, respectively.

March 31, 2018

December 31, 2017

FOCUSfactor intellectual property

Per-fekt intellectual property

Intangible assets subject to amortization

Less accumulated amortization

Intangible assets, net

expense for the three months ended March 31, 2018 and 2017 was $415,078 and $267,253, respectively.

These intangible assets were

acquired through an Asset Purchase Agreement and Stock Purchase Agreements entered into during 2015.

Related Party Transactions

Company accrued and paid consulting fees of $41,250 per month through April 2017 and $57,917 per month through September 2017,

accounting fees of $12,500 per month and rent of $1,500 per month to a company owned by Mr.

Company accrued and paid consulting fees of $57,917 for one month to a company owned by Mr.

Jack Ross, Chief Executive Officer

of the Company.

The Company expensed $215,751 during the three months ended September 30, 2017 and $580,585 during the nine months

ended September 30, 2017.

The Company also paid out a bonus of $525,000 during the nine months ended September 30, 2017.

September 30, 2017, the total outstanding balance was $0.

The Company expensed $57,917 during the three months ended March 31, 2018.

As of March 31, 2018, the total outstanding

balance was $0 for consulting fees and reimbursements.

January 22, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc.

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related party, for the purchase of the Focus Factor assets.

At September 30, 2017, the Company owed Knight $1,107,476 on this

loan, net of debt issuance cost (see Note 10).

June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc., through its wholly owned subsidiary

Neuragen Corp., for the purchase of Knight Therapeutics, Inc.’s assets.

At September 30, 2017, the Company owed Knight $587,500

in relation to this agreement (see Note 10).

At March 31, 2018, the Company owed Knight $0 on this loan, net of

debt issuance cost (see Note 10).

June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc.

(“Knight Therapeutics”),

through its wholly owned subsidiary Neuragen Corp., for the purchase of Knight Therapeutics, Inc.’s assets.

2018, the Company owed Knight Therapeutics $279,855 in relation to this agreement (see Note 10).

August 18, 2015, the Company entered into a Consulting Agreement with Kara Harshbarger, the co-founder of Hand MD, LLC, pursuant

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Hand MD, LLC is a 50% owner in Hand MD Corp.

The Company expensed $30,000 through payroll for the three months ended September

30, 2017 and $90,000 for the nine months ended September 30, 2017.

As of September 30, 2017, the total outstanding balance was

November 12, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for the

purchase of NomadChoice Pty Limited and Breakthrough Products, Inc.

At September 30, 2017, the Company owed Knight $673,744 on

this loan, net of debt issuance cost (see Note 10).

August 9, 2017, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for a working

capital loan.

At September 30, 2017, the Company owed Knight $9,572,290 on this loan, net of debt issuance cost (see Note 10).

Company expensed royalty of $83,079 during the three months ended September 30, 2017 and $318,342 during the nine months ended

September 30, 2017.

At September 30, 2017 NomadChoice Pty Ltd., a subsidiary of the Company, owed Knight Therapeutics $33,040

in connection with a royalty distribution agreement.

Company expensed royalty of $11,169 during the three months ended September 30, 2017 and $113,387 during the nine months ended

September 30, 2017.

At September 30, 2017 Sneaky Vaunt Corp., a subsidiary of the Company, owed Knight Therapeutics $3,223 in

connection with a royalty distribution agreement.

Company expensed commissions of $27,171 during the three months ended September 30, 2017 and $159,992 during the nine months ended

September 30, 2017.

At September 30, 2017 Sneaky Vaunt Corp., a subsidiary of the Company, owed Founded Ventures, owned by a shareholder

in the Company, $4,217 in connection with a commission agreement.

The Company paid a development fee for the brand, Sneaky Vaunt,

in the amount of $761,935 during the nine months ended September 30, 2017.

Company expensed commissions of $8,010 during the three and nine months ended September 30, 2017.

The Company paid a development

fee for the brand, The Queen Pegasus, in the amount of $1,000,000 during the three months ended September 30, 2017.

30, 2017, The Queen Pegasus, a subsidiary of the Company, owed Founded Ventures $3,814 in connection with a commission agreement.

Company paid $31,250 and $93,750 during the three and nine months ended September 30, 2017 to Hand MD, Corp, related to a royalty

At September 30, 2017, the Company owed Hand MD Corp.

The Company expensed $30,000 through payroll for the three months ended March 31,

As of March 31, 2018, the total outstanding balance was $0.

On November 12, 2015, the Company entered into a Loan Agreement with Knight for the purchase of NomadChoice

Pty Limited and Breakthrough Products, Inc.

At March 31, 2018, the Company owed Knight $0 on this loan, net of debt issuance cost

(see Note 10).

August 9, 2017, the Company entered into a Loan Agreement with Knight for a working capital loan.

At March 31, 2018, the Company

owed Knight $8,647,769 on this loan, net of debt issuance cost (see Note 10).

Company expensed royalty of $147,022 during the three months ended March 31, 2018.

At March 31, 2018 NomadChoice Pty Ltd., a subsidiary

of the Company, owed Knight Therapeutics $143,818 in connection with a royalty distribution agreement.

Company expensed royalty of $5,662 during the three months ended March 31, 2018.

At March 31, 2018 Sneaky Vaunt Corp., a subsidiary

of the Company, owed Knight Therapeutics $5,662 in connection with a royalty distribution agreement.

Company expensed commissions of $13,553 during the three months ended March 31, 2018.

At March 31, 2018 Sneaky Vaunt Corp., a

subsidiary of the Company, owed Founded Ventures, owned by a shareholder in the Company, $11,489 in connection with a commission

Company expensed royalty of $1,564 during the three months ended March 31, 2018.

At March 31, 2018 The Queen Pegasus, a subsidiary

of the Company, owed Knight Therapeutics $1,564 in connection with a royalty distribution agreement.

Company expensed commissions of $2,985 during the three months ended March 31, 2018.

At March 31, 2018, The Queen Pegasus, a subsidiary

of the Company, owed Founded Ventures $1,985 in connection with a commission agreement.

Company paid $62,500 during the three months ended March 31, 2018 to Hand MD, Corp, related to a royalty agreement.

2018, the Company owed Hand MD Corp.

$171,817 in minimum future royalties.

Accounts Payable and Accrued Liabilities

of September 30, 2017 and December 31, 2016, accounts payable and accrued liabilities consisted of the following:

of March 31, 2018, and December 31, 2017, accounts payable and accrued liabilities consisted of the following:

March 31, 2018

December 31, 2017

Accrued payroll

Accrued legal fees

Accounting fees

Professional Fees

Manufacturers

related party

Royalties, related party

Notes Payable

Company’s loans payable at September 30, 2017 and December 31, 2016 are as follows:

debt issuance cost

Company’s loans payable at March 31, 2018 and December 31, 2017 are as follows:

March 31, 2018

December 31, 2017

Loans payable

Unamortized debt issuance cost

Current portion

Long-term portion

January 22, 2015 Loan:

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to January 20, 2018.

Principal payments under the Loan Agreement commenced on June 30, 2015 and continue quarterly as set forth

Principal payments under the Loan Agreement commenced on June 30, 2015 and continued quarterly as set forth

on the Repayment Schedule to the Loan Agreement.

to certain restrictions, the Company may prepay the outstanding principal of the Loan (in whole but not in part) at any time if

the Company pays a concurrent prepayment fee equal to the greater of (i) the total unpaid annual interest that would have been

payable during the year in which the prepayment is made if the prepayment is made prior to the first anniversary of the closing,

This Loan was repaid in full on January 20, 2018.

The Company recognized and

paid interest expense of $4,611 during the three months ended March 31, 2018.

Accrued interest expense was $0 as of March 31,

to certain restrictions, the Company could prepay the outstanding principal of the Loan (in whole but not in part) at any

time if the Company pays a concurrent prepayment fee equal to the greater of (i) the total unpaid annual interest that would have

been payable during the year in which the prepayment is made if the prepayment is made prior to the first anniversary of the closing,

and (ii) $300,000.

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2016, this debt discount was fully expensed in conjunction with the cancellation of all warrants and options held by Knight.

Company also recorded deferred financing costs of $289,045 with respect to the above loan.

Company also recorded deferred financing costs of $289,045 with respect to the Knight loan.

The Company recognized amortization

of deferred financing costs of $14,267 and $42,337 during the three and nine months ended September 30, 2017, respectively.

debt issuance cost as of September 30, 2017 amounted to $17,524.

Company recognized and paid interest expense of $63,627 and $251,281 during the three and nine months ended September 30, 2017,

respectively.

Accrued interest expense was $0 as of September 30, 2017.

Loan payable balance was $1,125,000 as of September 30,

January 22, 2015 Loan:

January 22, 2015, the Company issued a 0% promissory note in a principal amount of $1,500,000 in connection with an Asset Purchase

The note has a maturity date of January 20, 2017, with $750,000 to be paid on or before January 20, 2016 and an additional

$750,000 to be paid on or before January 20, 2017.

This loan was paid in full in January 2017.

of deferred financing costs of $3,257 during the three months ended March 31, 2018.

Unamortized debt issuance cost as of March

31, 2018 amounted to $0.

June 26, 2015 Security Agreement:

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The Company recognized amortization

of deferred financing costs of $0 and $2,600 during the three and nine months ended September 30, 2017, respectively.

debt issuance cost as of September 30, 2017 amounted to $0.

The Company recorded present value of future payments of $284,538

and $290,947 as of September 30, 2017 and December 31, 2016, respectively.

The Company recorded imputed interest expense of $10,284

and $31,091 for the three and nine months ended September 30, 2017, respectively.

the three and nine months ended September 30, 2017, the Company made payments of $12,500 and $37,500, respectively, in connection

with this Security Agreement.

of deferred financing costs of $0 during the three months ended March 31, 2018.

Unamortized debt issuance cost as of March 31,

2018 amounted to $0.

The Company recorded present value of future payments of $279,855 and $282,240 as of March 31, 2018 and December

31, 2017, respectively.

The Company recorded imputed interest expense of $10,115 for the three months ended March 31, 2018.

the three months ended March 31, 2018, the Company made payments of $12,500 in connection with this Security Agreement.

November 12, 2015 Loan:

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The interest rate will decrease to 13% if we meet certain equity-fundraising

The New Loan Agreement matures on November 11, 2017.

The amended Loan Agreement matured on November 11, 2017 and was fully paid.

connection with the First Amendment, we issued Knight a warrant that entitles Knight to purchase 5,550,625 shares of our common

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common stock at $0.49 per share (“Knight Warrants”).

beneficial conversion feature of the warrants issued to Knight amounted to $2,553,287 (5,550,625 warrants) and $2,067,258 (4,547,243

beneficial conversion feature of the Knight warrants amounted to $2,553,287 (5,550,625 warrants) and $2,067,258 (4,547,243

warrants), respectively, and was recorded as debt discount of the corresponding debt in 2015.

2016, this debt discount was fully expensed in conjunction with the cancellation of all warrants and options held by Knight.

Company also recorded deferred financing costs of $233,847 with respect to the above loan.

The Company recognized amortization

of deferred financing costs of $29,431 and $87,333 during the three and nine months ended September 30, 2017, respectively.

debt issuance cost as of September 30, 2017 amounted to $13,756.

Company recognized interest expense of $57,213 and $259,402 during the three and nine months ended September 30, 2017, respectively.

During the three and nine months ended September 30, 2017, the Company paid interest of $65,689 and $284,830, respectively.

interest was $5,651 as of September 30, 2017.

Loan balance at September 30, 2017 was $687,500.

August 9, 2017 Loan:

August 9, 2017, we entered into a Second Amendment to Loan Agreement (“Second Amendment”) with Knight, pursuant to

which Knight agreed to loan us an additional $10 million, and an ongoing credit facility of up to $20 million, and which amount

was borrowed at closing (the “Financing”) for working capital purposes.

At closing, we paid Knight an origination

fee of $200,000 and a work fee of $100,000 and also paid $100,000 of Knight’s expenses associated with the Loan.

bears interest at a rate of 10.5% per year.

The New Loan Agreement matures on August 8, 2020.

9, 2017, we entered into a Second Amendment to Loan Agreement (“Second Amendment”) with Knight, pursuant to which

Knight agreed to loan us an additional $10 million, and an ongoing credit facility of up to $20 million, and which amount was

borrowed at closing (the “Financing”) for working capital purposes.

At closing, we paid Knight an origination fee

of $200,000 and a work fee of $100,000 and also paid $100,000 of Knight’s expenses associated with the Loan.

The Loan bears

interest at 10.5% per annum.

The amended Loan Agreement matures on August 8, 2020.

We have met all the covenants except for

the TTM EBITDA of $5 million during the current period and accordingly, Default Interest rate of 5% (from 10.5% to 15.5%) applies

in accordance to our current agreement and will be in effect starting April 1, 2018 and will be in effect until the $5 million

TTM EDITDA covenant is achieved.

Also, Synergy will maintain Focus Factor Net Sales as measured on a year-end basis of at least

USD $15 million for each fiscal year starting with December 31, 2017.

Company also recorded deferred financing costs of $452,869 with respect to the above loan.

The Company recognized amortization

of deferred financing costs of $25,159 during the three and nine months ended September 30, 2017.

Unamortized debt issuance cost

as of September 30, 2017 amounted to $427,710.

Company recognized interest expense of $153,352 during the three and nine months ended September 30, 2017.

Accrued interest was

$153,352 as of September 30, 2017.

Loan balance at September 30, 2017 was $10,000,000.

of deferred financing costs of $37,739 during the three months ended March 31, 2018.

Unamortized debt issuance cost as of March

31, 2018 amounted to $352,231.

Company recognized and paid interest expense of $242,083 during the three months ended March 31, 2018.

Accrued interest

was $0 as of March 31, 2018.

The loan balance at March 31, 2018 was $9,000,000.

Stockholders’

1 unchanged sentence

stock with $0.00001 par value.

the nine months ended September 30, 2017, the Company issued 473,326 shares of its common stock valued at $0.51 per share in accordance

with an asset purchase agreement entered into with Perfekt Beauty Holdings, LLC and CDG Holdings, LLC, in exchange for assets

and liabilities related to the Per-fekt brand.

of September 30, 2017 and December 31, 2016, there were 89,237,683 and 88,764,357 shares of the Company’s common stock issued

and outstanding, respectively.

of March 31, 2018, and December 31, 2017, there were 89,862,683 shares of the Company’s common stock issued and outstanding.

Commitments & Contingencies

2 unchanged sentences

no current legal matters that would have a material effect on the Company’s financial position or results of operations.

April 2014, a subsidiary entered into an extension of a non-cancellable operating lease for office space that expired on March

Rent expense under this lease for the period from acquisition until March 31, 2017 was $8,923 per month less a $3,010

per month sublease through March 2017 and expired.

December 2015, a subsidiary entered into a non-cancellable operating lease for office space through November 2016.

was extended until April 2017 and expired.

December 8, 2014, a subsidiary entered into a non-cancellable 36 month phone lease with an estimated cost of $894 a month.

Company and Mr.

Kadanoff entered into an employment agreement on October 10, 2017 with an initial term of 3 years.

for his service as Chief Financial Officer, Mr.

Kadanoff will receive an annual base salary of $450,000.

He will receive a signing

bonus consisting of:

(i) 100,000 shares of the Company’s common stock, and (ii) a cash payment equal to the value of 100,000

shares of the Company’s common stock based on a price of $0.55 per share.

He will receive an annual bonus for calendar year

2017 of $37,500.

Beginning with calendar year 2018, Mr.

Kadanoff will be eligible for an annual target bonus of up to half his

The target bonus will be determined at the discretion of our Board or compensation committee based upon the achievement

of financial and other performance-related goals and may be paid in cash or shares of the Company’s common stock.

connection with his employment, Mr.

Kadanoff has committed to purchasing 400,000 shares of our common stock from the Company for

a price of $0.55 per share.

The Company granted Mr.

Kadanoff an option to purchase 1,500,000 shares of the Company’s common

stock at an exercise price of $0.55 (the “Initial Option”).

The Initial Option will vest in three (3) equal annual

installments on the first three anniversaries of Mr.

Kadanoff’s Start Date with the Company, provided that Mr.

remains employed by the Company on each such date.

The Initial Option will expire on the tenth anniversary of the grant date.

Subject to the approval by the Board, during each calendar year of Mr.

Kadanoff’s employment with the Company beginning

with 2018, the Company will grant to him an option to purchase 500,000 shares of the Company’s common stock (such options

collectively the “Additional Options”).

The exercise price of each Additional Option will be the Fair Market Value

of the common stock on the date each such Additional Option is granted.

Each Additional Option will expire on the tenth anniversary

of the date of grant of such Additional Option.

The Additional Options will vest in three (3) equal annual installments on the

first three anniversaries of the date of grant of such Additional Option, provided that Mr.

Kadanoff remains employed by the Company

on each such date.

Upon the occurrence of a Change in Control , the vesting of stock options granted to Mr.

Kadanoff will be accelerated

subject to his continued service to the Company as of such date and provided further that Mr.

Kadanoff’s stock options will

be treated no less favorably than those of any other senior executive or Chairman of the Company.

Company and Mr.

McCullough entered into an employment agreement on October 17, 2017 (the “Employment Agreement”) with

an initial term of 3 years.

In exchange for his service as President, Mr.

McCullough will receive an annual base salary of $340,000.

He will receive a cash signing bonus of $37,500, to be paid on January 1, 2018, and an additional cash signing bonus of $37,500,

to be paid on July 1, 2018, provided that he is employed by the Company through such dates.

McCullough will be eligible for

an annual bonus of up to twenty-five percent (25%) of his base salary.

The annual bonus will be determined at the discretion of

our Board or compensation committee based upon the achievement of financial goals established by the Company’s Chief Executive

McCullough will also be eligible for additional bonus compensation based on the Company’s achievement of certain

annual earnings and retail sales goals established each year by the Company’s Chief Executive Officer.

Subject to the Company’s

achievement of an annual overall earnings goal and certain adjustments in the event of future acquisitions by the Company, Mr.

McCullough will be eligible to receive five percent (5%) of all retail sales by the Company in excess of the annual retail sales

goal set by the Chief Executive Officer.

Company granted Mr.

McCullough an option to purchase 1,000,000 shares of the Company’s common stock, subject to the approval

of the Company’s Board of Directors (the “Option Grant”).

The Option Grant will vest in three (3) equal annual

installments on the first three anniversaries of Mr.

McCullough’s start date with the Company, provided that Mr.

remains employed by the Company on each such date.

The Option Grant will be granted under the Company’s 2014 Stock Incentive

Plan pursuant to a stock grant agreement between the Company and Mr.

August 16, 2017, the Company entered into a sublease for office space, effective October 1, 2017 through May 2021.

1 unchanged sentence

following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining

non-cancelable lease terms in excess of one year as of September 30, 2017:

ending December 31:

remaining three months

non-cancelable lease terms in excess of one year as of March 31, 2018:

Year ending December 31:

remaining nine months

Stock Options

July 30, 2014, the Company’s board of directors approved the Company’s 2014 Equity Incentive Plan (the “Plan”)

and the reservation of 15,525,000 shares of common stock for issuance under the Plan.

The Plan was approved by the Company’s

shareholders and became effective on August 5, 2015.

April 2, 2014, the Company granted 1,000,000 options with an exercise price of $0.25 per share to a company owned by Mr.

Ross, Chief Executive Officer of the Company.

December 14, 2015, the Company granted 1,000,000 options each with an exercise price of $0.25 per share to two Board members of

December 14, 2015, the Company granted 1,000,000 options each with an exercise price of $0.65 per share to two employees of the

February 18, 2016, the Company granted 300,000 options with an exercise price of $0.70 per share to an employee of the Company.

April 18, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company.

July 4, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company.

2017, 333,333 unvested options were cancelled due to termination of employee.

October 10, 2017, the Company granted 1,000,000 options with an exercise price of $0.70 per share to an employee of the Company.

October 16, 2017, the Company granted 1,500,000 options with an exercise price of $0.55 per share to an employee of the Company.

October 18, 2017, the Company granted 200,000 options with an exercise price of $0.70 per share to an employee of the Company.

following table summarizes the options outstanding, option exercisability and the related prices for the shares of the Company’s

common stock issued to employees and consultants under the Plan at September 30, 2017:

stock option activity for the nine months ended September 30, 2017 is as follows:

common stock issued to employees and consultants under the Plan at March 31, 2018:

Options Outstanding

Options Exercisable

stock option activity for the three months ended March 31, 2018 is as follows:

Exercise Price

at December 31, 2016

at September 30, 2017

compensation expense related to vested options was $343,952 and $1,024,631 during the three and nine months ended September 30,

2017, respectively, which is a component of general and administrative expense in the statement of income.

The Company determined

the value of share-based compensation for options vesting during the period using the Black-Scholes fair value option-pricing

model with the following weighted average assumptions:

estimated fair value of Company’s common stock of $0.40-0.74, risk-free

interest rate of 0.90-2.23%, volatility of 135-160%, expected lives of 3-10 years, and dividend yield of 0%.

Stock options outstanding

as of September 30, 2017, as disclosed in the above table, have an intrinsic value of $840,000.

of September 30, 2017, unrecognized compensation costs related to non–vested stock–based compensation arrangements

were $514,328, and is expected to be recognized over a weighted average period of 1 year.

Outstanding at December 31, 2017

Expired or canceled

Outstanding at March 31, 2018

compensation expense related to vested options was $119,617 during the three months ended March 31, 2018 which is a component

of general and administrative expense in the statement of operations.

The Company determined the value of share-based compensation

for options vesting during the period using the Black-Scholes fair value option-pricing model with the following weighted average

estimated fair value of Company’s common stock of $0.40-0.74, risk-free interest rate of 0.90-2.23%, volatility

of 135-160%, expected lives of 3-10 years, and dividend yield of 0%.

Stock options outstanding as of March 31, 2018, as disclosed

in the above table, have an intrinsic value of $150,000.

As of March 31, 2018, unamortized stock-based compensation costs related

to options was $1,070,768, and will be recognized over a period of 2.5 years.

Stock Warrants

following table summarizes the warrants outstanding, warrant exercisability and the related prices for the shares of the Company’s

common stock at September 30, 2017:

warrant activity for the six months ended June 30, 2017 is as follows:

at December 31, 2016

at September 30, 2017

outstanding as of September 30, 2017, as disclosed in the above table, have an intrinsic value of $0.

identification and selection is consistent with the management structure used by the Company’s chief operating decision

maker to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results

consistent with that structure.

Based on the Company’s management structure and method of internal reporting, the Company

has one operating segment.

The Company’s chief operating decision maker does not review operating results on a disaggregated

rather, the chief operating decision maker reviews operating results on an aggregate basis.

sales attributed to customers in the United States and foreign countries for the three months ended September 30, 2017 and 2016

were as follows:

Company’s net sales by product group for the three months ended September 30, 2017 and 2016 were as follows:

Nutraceuticals

the Counter (OTC)

Cosmeceuticals

Net sales for any other product group of similar products are less than 10% of consolidated net sales.

sales attributed to customers in the United States and foreign countries for the nine months ended September 30, 2017 and 2016

were as follows:

Company’s net sales by product group for the nine months ended September 30, 2017 and 2016 were as follows:

following table summarizes the warrants outstanding, warrant exercisability and the related exercise prices for the shares

of the Company’s common stock at March 31, 2018:

Warrants Outstanding

Warrants Exercisable

warrant activity for the three months ended March 31, 2018 is as follows:

Outstanding at December 31, 2017

Expired or canceled

Outstanding at March 31, 2018

outstanding as of March 31, 2018, as disclosed in the above table, have an intrinsic value of $0.

identification and selection is consistent with the management structure used by the Company’s management to evaluate

performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent with

that structure.

Based on the Company’s management structure and method of internal reporting, the Company has one operating

The Company’s management does not review operating results on a disaggregated basis;

rather, management

reviews operating results on an aggregate basis.

sales attributed to customers in the United States and foreign countries for the three months ended March 31, 2018 and 2017 were

March 31, 2018

March 31, 2017

United States

Foreign countries

Foreign countries primarily consist of Australia and Canada.

Company’s net sales by product group for the three months ended March 31, 2018 and 2017 were as follows:

March 31, 2018

March 31, 2017

Nutraceuticals

the Counter (OTC)

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

Net sales for any other product group of similar products are less than 10% of consolidated net sales.

assets (net) attributable to operations in the United States and foreign countries as of September 30, 2017 and December 31, 2016

Company’s net sales by major sales channel for the three months ended March 31, 2018 and 2017 were as follows:

assets (net) attributable to operations in the United States and foreign countries as of March 31, 2018 and December 31, 2017

were as follows:

tax expense was $97,713 and $221,424 for the three and nine months ended September 30, 2017, respectively, compared to $264,376

and $659,462, respectively, for the same periods in 2016.

The current provision is attributable to Australian operations and the

current tax rate in effect in that country.

The Company also has operations in Canada that started at the beginning of 2016 and

is currently evaluating its tax position as it pertains to the 2017 year end.

total deferred tax asset is calculated by multiplying a domestic (US) 34% marginal tax rate by the cumulative net operating loss

carryforwards (“NOL”).

March 31, 2018

December 31, 2017

United States

Foreign countries

countries consist of Australia and Canada.

Note 16 –

Income tax expense was $160,613 for the three

months ended March 31, 2018, respectively, compared to $291,467 for the same period in 2017.

The current provision is attributable

to Australian operations and the current tax rate in effect in that country.

December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S.

corporate income tax law, was signed

into law by President Trump.

The TCJA contains significant changes to corporate income taxation, including but not limited to

the reduction of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction

for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses

to 80% of current year taxable income and generally eliminating net operating loss carrybacks, allowing net operating losses to

carryforward without expiration, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated,

elimination of U.S.

tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments

instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including

changes to the orphan drug tax credit and changes to the deductibility of research and experimental expenditures that will be

effective in the future).

Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal

tax law is uncertain, including to what extent various states will conform to the newly enacted federal tax law.

Company has not recorded the necessary provisional adjustments in the financial statements in accordance with its current understanding

of the TCJA and guidance currently available as of this filing.

But is reviewing the TCJA’s potential ramifications, as

the Company acts to bring tax compliance up to day.

total deferred tax asset is calculated by multiplying a domestic (US) 21% marginal tax rate by the cumulative net operating

loss carryforwards (“NOL”).

The Company currently has NOLs, which expire through 2035.

3 unchanged sentences

(the “Code”) Section 382/383, change of ownership rules.

If the Company has had a change in ownership, the NOL’s

would be limited as to the amount that could be utilized each year, based on the Code.

Asset Purchase

June 21, 2017, the Company entered into and simultaneously closed on an Asset Purchase Agreement with Perfekt Beauty Holdings

LLC and CDG Holdings, LLC, which owns 92.3% of the issued and outstanding equity interests of Perfekt Beauty.

Perfekt Beauty is

engaged in the business of developing and selling skincare and cosmetics products under the brand Per-fekt.

Company has accounted for this transaction under the acquisition method of accounting.

Under the acquisition method of accounting,

the total acquisition consideration price is allocated to the assets acquired and liabilities assumed based on their estimated

The Company has allocated the purchase price to the assets acquired and liabilities assumed as follows:

Consideration

paid in 473,326 shares of common stock

additional consideration, the Company will pay quarterly royalties equal to 5% of net sales for 10 years following the closing

The purchase price is subject to adjustment as provided in the Purchase Agreement, based on the final amounts of accounts

payable, accounts receivable and new and unsold inventory.

If the Company has had a change in ownership, the

NOL’s would be limited as to the amount that could be utilized each year, based on the Code.

Subsequent Events

2 unchanged sentences

into the unaudited condensed consolidated financial statements.

October 2017, the Company paid $352,344 in principal and accrued interest on the second loan (November 12, 2015) to Knight Therapeutics

(Barbados) Inc.

October 2017, the Company hired a new Chief Financial Officer, Jeffrey Kadanoff, with an employment date of November 1, 2017.

In exchange for his service as Chief Financial Officer, Mr.

Kadanoff will receive an annual base salary of $450,000.

He will receive

a signing bonus consisting of:

(i) 100,000 shares of the Company’s common stock, and (ii) a cash payment equal to the value

of 100,000 shares of the Company’s common stock based on a price of $0.55 per share.

He will receive an annual bonus for

calendar year 2017 of $37,500.

Beginning with calendar year 2018, Mr.

Kadanoff will be eligible for an annual target bonus of

up to half his base salary.

The target bonus will be determined at the discretion of our Board or compensation committee based

upon the achievement of financial and other performance-related goals and may be paid in cash or shares of the Company’s

common stock.

In conjunction with the employment agreement, Mr.

Kadanoff purchased 400,000 shares of the Company’s stock

at $0.55 per share.

Kadanoff was also awarded an option to purchase 1,500,000 shares of stock at an exercise price of $0.55

The Initial Option will vest in three (3) equal annual installments on the first three anniversaries of Mr.

Kadanoff’s

Start Date with the Company, provided that Mr.

Kadanoff remains employed by the Company on each such date.

The Initial Option

will expire on the tenth anniversary of the grant date.

Subject to the approval by the Board, during each calendar year of Mr.

Kadanoff’s employment with the Company beginning with 2018, the Company will grant to him an option to purchase 500,000

shares of the Company’s common stock (such options collectively the “Additional Options”).

The exercise price

of each Additional Option will be the Fair Market Value of the common stock on the date each such Additional Option is granted.

Each Additional Option will expire on the tenth anniversary of the date of grant of such Additional Option.

The Additional Options

will vest in three (3) equal annual installments on the first three anniversaries of the date of grant of such Additional Option,

provided that Mr.

Kadanoff remains employed by the Company on each such date.

Upon the occurrence of a Change in Control , the

vesting of stock options granted to Mr.

Kadanoff will be accelerated subject to his continued service to the Company as of such

date and provided further that Mr.

Kadanoff’s stock options will be treated no less favorably than those of any other senior

executive or Chairman of the Company.

October 2017, the Company hired a new President, Patrick McCullough, with an employment date of November 6, 2017 and a three-year

initial term.

In exchange for his service as President, Mr.

McCullough will receive an annual base salary of $340,000.

receive a cash signing bonus of $37,500, to be paid on January 1, 2018, and an additional cash signing bonus of $37,500, to be

paid on July 1, 2018, provided that he is employed by the Company through such dates.

McCullough will be eligible for an annual

bonus of up to twenty-five percent (25%) of his base salary.

The annual bonus will be determined at the discretion of our Board

or compensation committee based upon the achievement of financial goals established by the Company’s Chief Executive Officer.

McCullough will also be eligible for additional bonus compensation based on the Company’s achievement of certain annual

earnings and retail sales goals established each year by the Company’s Chief Executive Officer.

Subject to the Company’s

achievement of an annual overall earnings goal and certain adjustments in the event of future acquisitions by the Company, Mr.

McCullough will be eligible to receive five percent (5%) of all retail sales by the Company in excess of the annual retail sales

goal set by the Chief Executive Officer.

In conjunction with the employment agreement, Mr.

McCullough was awarded an option to

purchase 1,000,000 shares of stock with an exercise price of $0.70 per share.

The Option Grant will vest in three (3) equal annual

installments on the first three anniversaries of Mr.

McCullough’s start date with the Company, provided that Mr.

remains employed by the Company on each such date.

October 2017, the Company appointed a new board member, Gale Bensussen.

to March 31, 2018, the Company made an additional $500,000 payment on $10,000,000 loan.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion and analysis of the results of operations and financial condition of Synergy for the three and nine months

ended September 30, 2017 and 2016, should be read in conjunction with the unaudited condensed consolidated financial statements

of Synergy, and the notes to those unaudited condensed consolidated financial statements that are included elsewhere in this Form

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties,

such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially from

those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the

caption, “Cautionary Notice Regarding Forward-Looking Statements”

following discussion and analysis of the results of operations and financial condition of Synergy for the three months ended March

31, 2018 and 2017, should be read in conjunction with the unaudited condensed consolidated financial statements of Synergy, and

the notes to those unaudited condensed consolidated financial statements that are included elsewhere in this Form 10-Q.

Our discussion

includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives,

expectations and intentions.

Actual results and the timing of events could differ materially from those anticipated in these forward-looking

statements as a result of a number of factors, including those set forth under the caption, “Cautionary Notice Regarding

Forward-Looking Statements”

and the “Business”

section in our Form

10-K filed on March 24, 2017.

We use words such as “anticipate,”

section in our Form 10-K filed on April 2, 2018.

such as “anticipate,”

“estimate,”

29 unchanged sentences

GAAP”), provides useful information to investors.

September 30, 2017

Net income after tax

Interest income

Interest expense

Depreciation and amortization

of debt issuance cost

One time income

Stock-based compensation

on foreign currency translation and transaction

Adjusted EBITDA

September 30, 2017

Net income after taxes

For the three

March 31, 2018

Interest income

Interest expense

Depreciation and amortization

of debt issuance cost

One time income

Stock-based compensation

on foreign currency translation and transaction

One-time expenses

Loss on foreign currency translation and transaction

Adjusted EBITDA

4 unchanged sentences

other activity and certain expenses and transactions that we believe are not representative of our core operating results, including

gain on change in fair value of derivative liability;

stock-based compensation;

one-time expenses for acquisitions;

on foreign currency translation and transaction.

The Company’s definitions of EBITDA and adjusted EBITDA might not be comparable

to similarly titled measures reported by other companies.

of Operations for the Three months Ended September 30, 2017 and 2016

the three months ended September 30, 2017, we had revenue of $9,175,673 from sales of our products, as compared to revenue of

$11,569,568 for the same period in 2016.

The decrease is attributable to a change in marketing structure, and is comprised of

the following categories:

Nutraceuticals

the Counter (OTC)

Cosmeceuticals

the three months ended September 30, 2017, our cost of revenue was $2,657,623.

Our cost of revenue for the three months ended

September 30, 2016, was $2,657,623.

The decrease is proportionate with the decrease in sales and is comprised of the following

Nutraceuticals

the Counter (OTC)

Cosmeceuticals

profit was $6,518,050, or 71% for the three months ended September 30, 2017, as compared to gross profit of $8,094,409, or 70%

for the same period in 2016, a decrease of $1,576,359, or 19%.

The decrease in gross profit is due to lower sales and launching

new products without adding additional resources.

and Marketing Expenses

the three months ended September 30, 2017, our selling and marketing expenses were $3,685,313 as compared to $3,051,808 for the

same period in 2016, which is primarily due to marketing our various products in multiple media channels including print, television

and online and the launch of our new product line.

and Administrative Expenses

the three months ended September 30, 2017, our general and administrative expenses were $1,990,743.

For the three months ended

September 30, 2016, our general and administrative expenses were $1,811,395.

The increase is primarily due to increased personnel

and operations as our company has grown.

and Amortization Expenses

the three months ended September 30, 2017, our depreciation and amortization expenses were $396,857 as compared to $298,079 for

the same period in 2016.

Income and Expenses

the three months ended September 30, 2017 and 2016 we had other (income) and expense items of the following:

September 30, 2017

September 30, 2016

Remeasurement

gain on translation of foreign subsidiary

on change in fair value of derivative liability

of debt discount

of debt issuance cost

other expense (income)

the three months ended September 30, 2017, we had interest expense of $272,318 as compared to $432,622 for the same period in

The decrease was due to the payoffs and pay downs of the loans.

For the three months ended September 30, 2017, we had other

income of $111,666 as compared to $nil for the same period in 2016.

We also issued warrants along with the loans and paid debt

issuance cost in 2015 which led to the amortization of debt discount and debt issuance costs.

We issued warrants with a reset

provision in 2015 which led to the calculation of warrant derivative liability and hence we recorded a gain on change in fair

value of derivative liability of $1,137,309.

In 2016 we cancelled those warrants and issued shares.

the three months ended September 30, 2017, our net income was $127,486 as compared to a net income of $3,050,466 for the same

period in 2016.

of Operations for the Nine months Ended September 30, 2017 and 2016

the nine months ended September 30, 2017, we had revenue of $29,282,910 from sales of our products, as compared to revenue of

$28,111,894 for the same period in 2016.

The increase is due to a new company launch and a major customer expanding our store

count and product line, and is comprised of the following categories:

one-time expenses;

and the loss on foreign currency translation and transaction.

The Company’s

definitions of EBITDA and adjusted EBITDA might not be comparable to similarly titled measures reported by other companies.

of Operations for the Three months Ended March 31, 2018 and 2017

the three months ended March 31, 2018, we had revenue of $9,700,861 from sales of our products, as compared to revenue

of $10,788,319 for the same period in 2017.

The decrease is due to regular fluctuations in business, and is comprised

of the following categories:

March 31, 2018

March 31, 2017

Nutraceuticals

the Counter (OTC)

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

the nine months ended September 30, 2017, our cost of revenue was $7,622,577.

Our cost of revenue for the nine months ended September

30, 2016, was $7,694,028.

The decrease is due to the mix of our products changing and selling more products with better margins

is comprised of the following categories:

For the three months

ended March 31, 2018, our cost of revenue was $2,809,908.

Our cost of revenue for the three months ended March 31, 2017, was $2,502,530.

The increase is due to a different mix of products being sold and is comprised of the following categories:

March 31, 2018

March 31, 2017

Nutraceuticals

the Counter (OTC)

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

profit was $21,660,333, or 74% for the nine months ended September 30, 2017, as compared to gross profit of $20,417,866, or 73%

for the same period in 2016, an increase of $1,242,467, or 6%.

The increase in gross profit margin is directly related to increase

in sales and better negotiated deals with manufacturers, utilizing volume purchasing to avail lower prices and purchasing finished

goods instead of buying components.

profit was $6,890,953, or 71% for the three months ended March 31, 2018, as compared to gross profit of $8,285,789, or 77% for

the same period in 2017, a decrease of $1,394,836, or 17%.

The decrease in gross profit margin is directly related

to a decrease in sales and promotions run online.

and Marketing Expenses

the nine months ended September 30, 2017, our selling and marketing expenses were $10,806,422 as compared to $6,688,663 for the

same period in 2016, which is primarily due to marketing our various products in multiple media channels including print, television

and online and the launch of our new product line.

the three months ended March 31, 2018, our selling and marketing expenses were $4,252,703 as compared to $2,897,197 for the same

period in 2017, which is primarily due to increased personnel in our advertising and marketing departments.

and Administrative Expenses

the nine months ended September 30, 2017, our general and administrative expenses were $6,296,355.

For the nine months ended September

the three months ended March 31, 2018, our general and administrative expenses were $1,760,856.

For the three months ended March

31, 2017, our general and administrative expenses were $1,937,643.

The increase is primarily due to increased personnel and operations

as our company has grown.

The decrease is primarily due to better management of

operating costs.

and Amortization Expenses

the nine months ended September 30, 2017, our depreciation and amortization expenses were $1,046,286 as compared to $871,089 for

the same period in 2016.

the three months ended March 31, 2018, our depreciation and amortization expenses were $451,486 as compared to $292,318 for the

same period in 2017.

The increase is due to more assets owned in 2018.

Income and Expenses

the nine months ended September 30, 2017 and 2016 we had other (income) and expense items of the following:

September 30, 2017

September 30, 2016

Remeasurement

gain on translation of foreign subsidiary

on change in fair value of derivative liability

on sale of assets

of debt discount

of debt issuance cost

other expense

the nine months ended September 30, 2017, we had interest expense of $706,759 as compared to $1,265,844 for the same period in

The decrease was due to the payoffs and pay downs of the loans.

For the nine months ended September 30, 2017, we had other

income of $111,666 as compared to $nil for the same period in 2016.

We also issued warrants along with the loans and paid debt

issuance cost in 2015 which led to the amortization of debt discount and debt issuance costs.

We issued warrants with a reset

provision in 2015 which led to the calculation of warrant derivative liability and hence we recorded a gain on change in fair

value of derivative liability of $1,560,384.

In 2016 we cancelled those warrants and issued shares.

the nine months ended September 30, 2017, our net income was $2,635,959 as compared to a net income of $5,848,552 for the same

period in 2016.

the three months ended March 31, 2018 and 2017 we had other (income) and expense items of the following:

March 31, 2018

March 31, 2017

Interest income

Interest expense

Remeasurement loss on translation of foreign subsidiary

Loss on sale of assets

Amortization of debt issuance cost

Total other expense

the three months ended March 31, 2018, we had interest expense of $270,176 as compared to $247,364 for the same period in 2017.

The increase was due to Loan 3.

(Loss) Income

the three months ended March 31, 2018, our net (loss) was ($55,493) as compared to a net income of $2,558,654 for

the same period in 2017.

and Capital Resources

of September 30, 2017, we had $5,408,927 cash on hand and working capital of $4,861,810.

In addition, we also had restricted cash

of $139,173 which is held for credit card collateral.

Company’s unaudited condensed consolidated financial statements are prepared using U.S.

GAAP applicable to a going concern,

which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The Company had

an accumulated deficit at September 30, 2017 of $6,730,041.

The Company had working capital of $4,861,810 as of September 30,

Due to acquisitions during 2015 of revenue-producing products, the Company believes it has established an ongoing source

of revenue that is sufficient to cover its operating costs and has income from operations of $3,511,270 for the nine months ended

September 30, 2017.

Management’s

plans to continue as a going concern include growing sales revenue on our existing brands, raising additional capital through

borrowing and sales of common stock.

However, management cannot provide any assurances that the Company will be successful in

accomplishing any of its plans.

ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described

in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.

The accompanying

unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is

unable to continue as a going concern.

months ended September 30, 2017 and 2016

of March 31, 2018, we had $1,686,181 cash on hand and a $3,249,449 working capital surplus.

In addition, we also had restricted

cash of $139,439, which is primarily held for credit card collateral.

months ended March 31, 2018 and 2017

Cash Provided by Operating Activities

Net cash provided by

operating activities for the nine months ended September 31, 2017 was $969,227, compared to $6,247,059 for the same period

This decrease in net cash provided by operating activities for the nine months ended September 30, 2017 was primarily

attributable to a net decrease in net income.

The $969,227 consists of our net income

of $2,635,959 adjusted by:

of debt issuance cost

and amortization

based compensation

on sale of assets

cash implied interest

Remeasurement

gain on translation of foreign subsidiary

currency transaction loss

in accounts receivable

in prepaid expenses

in deferred revenue

in accounts payable and accrued expenses

cash provided by operating activities for the three months ended March 31, 2018 was $944,647, compared to $1,676,330 for the same

period in 2017.

This decrease in net cash provided by operating activities for the three months ended March 31, 2018 was primarily

attributable to an increase in inventory and a decrease in accounts payable.

$944,647 consists of our net loss of $55,493 adjusted by:

Amortization of debt issuance cost

Depreciation and amortization

Stock based compensation

Non cash implied interest

Remeasurement loss on translation of foreign subsidiary

Foreign currency transaction loss

Decrease in accounts receivable

Increase in inventory

Decrease in prepaid expenses

Increase in deferred revenue

Decrease in accounts payable and accrued expenses

Cash Used in Investing Activities

Net cash used in investing

activities for the nine months ended September 30, 2017 was $1,899,289, compared to net cash used of $2,446,641 for the

same period in 2016.

The decrease in cash used in investing activities during 2017 is attributable to the payout of an earn out

liability in 2016.

for acquisition of fixed assets

from sale of assets

of development fees

in restricted cash

cash used in investing activities for the three months ended March 31, 2018 was $137,093, compared to net cash used of $85,583

for the same period in 2017.

The increase in cash used in investing activities during 2018 is attributable to the purchase of

fixed assets.

Payments for acquisition of fixed assets

Payment for acquisition of domain name

Increase in restricted cash

Cash Used in Financing Activities

cash provided by financing activities for the nine months ended September 30, 2017 was $3,884,631, compared to net cash used of

cash used in financing activities for the three months ended March 31, 2018 was $1,137,500, compared to net cash used of $2,387,500

for the same period in 2017.

This is attributable to proceeds from a new loan.

of notes payable

from notes payable

of debt issuance costs

This is attributable to the repayment of notes.

Repayment of notes payable

$ (1,137,500 )

2018 Initiatives

7 unchanged sentences

Obligations and Off-Balance Sheet Arrangements

our normal course of business, we may enter into contractual obligations that require future cash payments.

At September 30, 2017

we are contractually obligated to repay notes payable (see Note 10).

Sheet Arrangements

17 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements